Wei Zhu

Financial Markets, Market neutral strategy

Relative value

Relative value managers apply arbitrage strategies primarily in global equity and bond markets to take advantage of perceived mispricings between similar or related securities.

Relative value spread trade

The underlying principle for all relative value strategies is spread trading. By establishing long positions in undervalued assets and short positions in overvalued assets, relative value managers aim to capture profit opportunities that arise from the changing price relationship between the securities concerned.